Here are the key things you need to know before you leave work today.
MORTGAGE RATE CHANGES
Kiwibank raised all its fixed rates. Details here. Nelson Building Society (NBS) also raised its one and two year fixed rates.
TERM DEPOSIT RATE CHANGES
Rabobank raised all its term deposit rates, plus some of its savings rates. It to TD rate is now 3.20% pa for five years. Its 60 day Notice Saver rate is now 1.40%. Update: TSB has also raised its term deposit rates
HANGING ON
The latest weekly data on filled jobs through October shows increases, but they are pretty modest. Current jobs growth is slower than pre-Delta, after strong hiring activity in the middle of 2021. Monthly underlying net job additions have added just under +6,000 jobs since August compared to +41,000 through the middle of the year. There’s still a lot of jobs being supported by the Wage Subsidy, with the latest full payment data showing 265,000 jobs supported, representing around 11% of the workforce. Unsurprisingly jobs in Auckland and hospitality account for the lion’s share of this support.
SOME UGLY DECLINES
Last week the NZX50 saw its capitalisation fall almost -1%, and that is becoming a bit of a habit. There were no notable rises (although Chorus's (CNU, #14) +4.8% recovery might qualify), but a few notable falls in the group of larger companies. Pushpay (PPH, #24) fell -5.6% in the week, Pacific Edge (PEB, #34) fell -10.1%, Vista Group (VGL, #39) fell -9.7%, and Serko (SKO, #37) lost -14.0% of its capitalisation in the week.
SOME UGLY RISES
Readers will have noticed empty shelves at some supermarkets. These operators will struggle to keep the shelves stocked, especially of imported product. And that is showing up in the cost of the weekly shopping bill as more expensive local products need to be substituted. And there is little incentive to compete on price when there are shortages. Our weekly monitoring of a healthy shopping list jumped last week by the most since we started this monitoring in 2011.
SLOWER DATA, LESS USEFUL
The RBNZ is giving up its publication of some key household balance sheet data (C21 and C22), instead relying on Stats NZ to release this data as part of their System of National Accounts. Unfortunately that will make this useful data, which the RBNZ already took nine weeks to release, even slower to obtain, pushing it out to 15 weeks after the end of each quarter. It also means the RBNZ's "Key Graph on household debt" will also have to wait on the Stats NZ release. The result will be 'good' data useful for history academics but much less useful for actual decision makers. The horse may have bolted.
LOCAL PANDEMIC UPDATE
In Australia, Delta cases in Victoria have risen again to 1007 cases reported there today. There are now 11,501 active cases in the state - and there were another 3 deaths yesterday. In NSW there were another 150 new community cases reported today, with 2669 active locally acquired cases, and they had no deaths yesterday. Queensland is reporting three new cases. The ACT has 7 new cases again. Overall in Australia, just under 87% of eligible Aussies are fully vaccinated, plus a bit under 6% have now had one shot so far. In contrast, there were three cases in New Zealand at the border, and 182 new community cases today. Now 92.2% of Kiwis nationally aged 12+ have had at least one vaccination, and the Australian rate is now at 92.3% of all aged 16+.
GOLD HOLDS
In early Asian trading, gold is at US$1794 and little-changed from this time Friday. But it is up +US$9 from the weekend close in New York.
EQUITIES WEAK
All eyes will be on the Wall Street opening tomorrow. The S&P500 futures currently indicate a +0.8% rise as the 'fear' of Omicron fades somewhat. Today, the NZX50 is down -0.6% nearing the close (although FHP is up +1.9% and as they dominate the NZX50, that means there are some rather chunky falls today. Dozens exceeding -2%, and only 16 showing a gain, including a few tiddlers.). The ASX200 is down -0.4% in early afternoon trade. Tokyo has opened down -0.7%. Hong Kong has opened down -0.5%. Shanghai has opened down -0.7%.
SWAP & BONDS RATES SEARCHING FOR OMICRON LOGIC
We don't have today's closing swap rates yet. They are could be anything but they are likely to be unchanged after being quite lower earlier in the day The 90 day bank bill rate is unchanged at 0.80%. The Australian Govt ten year benchmark rate is now at 1.77% and up +11 bps from this morning. The China Govt 10yr is at 2.88% and little-changed. The New Zealand Govt 10 year rate is now at 2.44% and down -3 bps and now above the earlier RBNZ fix for that 10yr rate at 2.44% (-14 bps). The US Govt ten year is rising after initially falling on the new-variant virus news, up +6 bps from this morning to 1.54%.
NZ DOLLAR SOFTER
The Kiwi dollar is now at 68.3 USc and holding at this sharply lower level. Against the Aussie we are slightly firmer at 95.7 AUc. Against the euro we are down to 60.5 euro cents. The TWI-5 is now down to just under 73.
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BITCOIN VOLATILE
The bitcoin price is making a comeback, now at US$57,713 and up from US$54,135 when we opened this morning. But is still down from the US$58,829 at this time on Friday. Volatility in the past 24 hours has been very high at just on +/- 4.6%.
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47 Comments
In Waikato Times news: 400 maori got first shot
Covid-19: First timers roll up for Waikato's super jab weekend | Stuff.co.nz https://i.stuff.co.nz/national/health/coronavirus/127100621/covid19-fir…
Entry for foreigners into Japan is halted. No firm details as yet. No messing around.
https://financialpost.com/pmn/business-pmn/japan-to-effectively-close-b…
Printing to save Housing Wastrels is not on....We need their System to change to Taxing these idiots who invested funny munny to fund their growth markets....out of thin air.
Stupidity is following the Cult. Funding it into posterity is Stupidity Personified. This has been going on far too long. Just imagine how many ICU units could be funded by the Billions wasted and how many Hospital Staff could be supported with the Billions wasted and how many over -loaded Taxpayers could given tax relief when prices rise beyond a simple 2%, like Mr Orr is mandated to manage. Some bleedin hopes that will ever prevail.
Please note those Savers with money in the Banking System....you are being rorted, just remove all traces of Folding Money and put it in your Pocket...Little Interest will soon turn into Real Interest, if we can all Work together.....Debt is a waste of munny......not something to look forwards to.....from Tenants in definately. Crap Houses are are going to hit the Fan.....And that one can bet the Bank on...Cos they damn well did.
New RVs for Wellington are available now via QV.
Some awkwardness has ensued on TradeMe as a large number of properties appear to be advertised with their new RV but a price estimated against the 2018 RV. Subsequently, most are asking well below the 2021 RV. Oh dear (Oh cheap?).
That depends on what the average increase was. If 151% was more than average then yes that will mean a bigger rates increase than those less than the average.
In our town rumor has it the bottom end of the market increased by substainty more than the top end % wise. So those that can least afford it will be hit with bigger increase.
I think there will be a rates increase which we can handle as we are both earning good money. And as mentioned the bulk of the rates cost is in the fixed services, the proportional increase related to value shouldn't affect us too badly. The property went from 760k to 1150.
I have friends who just got in the market and it was crazy hard. This is a terrible situation for anyone not in the market. The ladder has officially been pulled up.
Aussie media getting nervous of NZ property bubble. Starting with a 25% housing price fall.
.......many borrowers are going to roll over from fixed rates of about 2.6 per cent to fixed rates of about 4.6 per cent, which Sproules says will have two key impacts.
The first is that higher rates, coupled with moves by the RBNZ to increase home loan serviceability buffers (as the prudential regulator has done here), will hit borrowing capacity, with Sproules predicting borrowing capacity could fall by as much as 22 per cent.
Second, higher mortgage costs mean housing chews up a greater proportion of household income; Citi believes some households could see a 20 per cent cut in their spending.
“House prices rose by more than 25 per cent as mortgage rates fell by about 200 basis points, so we expect a proportionate reaction as rates move higher. As such, it is not inconceivable to think that house prices could fall by 25 per cent as mortgage rates reverse the COVID-related 200 basis point fall,” Sproules says
https://www.afr.com/chanticleer/why-you-should-be-wary-of-a-kiwi-house-…
Thanks for this, we need to look at what people are saying overseas about our ponzi,
It's fair to say that they're also concerned about the repercussions given that Aussies are heavily invested in their bank stocks: an integral part of the bubble. It's a little hypocritical if you ask me. Aussie has also doubled down on their own bubble.
How many tourists have escaped the Queenstown real estate agent/developer/lawyer tentacles? Not many.
They greet you at the airport (and might swish it is now, as well!); show you their latest development - just you, nobody else knows about it yet, and they know a friend who can do all the paperwork for you. Just drop a deposit into our account on the way out, and let us take care of all the hard work looking after your can't-lose investment.
It works! I know. I was one of them...... The mistake I made ; which is not part of the sale-pitch, was returning to live there.
Life gives you a chuckle every now and then.
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